Waiving Elective Shares in a Prenuptial Agreement

The thought of getting a prenuptial agreement can make some people uncomfortable and it’s understandable why this is so. At the birth of a new relationship, who wants to think about it ending in divorce or death? And you need to delve into each other’s finances and hire a lawyer too? Maybe throw in a root canal too for good measure.

They may not be romantic but prenuptial agreements are a smart way for you and your future spouse to plan for the future. You may not get divorced but death is a little more certain. 

In addition to addressing how you want your marital assets to be divided if you split up, a prenup can also set out how you and your new spouse want to deal with inheritance rights. Prenups are commonly used in second marriages when spouses want to leave something to their children from a prior marriage. This is done by having one or each spouse waive their elective shares, which is their right of inheritance.

New York Prenups

A prenuptial agreement is a contract signed by future spouses before they are married. They typically cover how property will be divided in case of divorce. They also might address the financial rights and responsibilities of each spouse during marriage and how much spousal support will be paid after the marriage. Lastly, they can address the estate rights of each spouse upon death. 

New York, like the rest of the states, has general laws that determine how property is to be divided when couples divorce or a spouse dies. By using a prenuptial agreement, the couple can bypass those laws and craft a document that addresses their specific circumstances.

The Spousal Right of Election 

The spousal right of election relates to the inheritance rights of a husband or wife. Under New York law, after the death of a spouse, the surviving spouse is entitled to an "elective share" of the deceased’s estate. This share is defined as $50,000.00 or one-third of the net estate, whichever is more. 

For example, let’s say your spouse has $15 million in their net estate when they die. But their will leaves you $10,000. The right of election would give you the option of taking $5 million of the estate. Or, if the spouse had an estate of $120,000 when they died, you could then take $50,000 as the elective share. 

The law is intended to protect a surviving spouse from being cut out of the deceased spouse’s will or being left less than they are entitled to under state law.  

This right is automatic and absolute but a spouse can waive the right in a prenuptial agreement. Specifically, a spouse can agree not to exercise their spousal option to take the elective share against the spouse’s estate if they die and you are still married. 

Waiver More Common in Second Marriages

Why would someone waive their elective share in a prenup leaving? Oftentimes it is to protect their children from previous relationships. By waiving their share in the other’s estate, each spouse can be assured that their respective children will receive their inheritance. 

Sure, you and your spouse can agree to take care of each other’s children when the other one is gone. But there’s no guarantee that the surviving spouse won’t change their mind and leave their spouse’s children with nothing.

Other people who may be willing to waive the right of election are New York couples who get married later in life and who each have accumulated significant assets. Perhaps they have separate philanthropic and investment interests and choose to keep their assets totally separate. They don’t need each other’s money while they are married and won’t need any when the other is gone. 

Can you waive the elective share and still inherit something? Yes, the prenup can specify that you will waive the elective share but will instead inherit a different specified amount. So you can agree to waive your to an elective share and your spouse can agree to leave you a set amount in their will. 

If you are getting married, it is a smart move to consider the many benefits of a prenuptial agreement. This is particularly the case if  you have children from a previous relationship. Consult with an experienced New York divorce lawyer who has experience crafting prenuptial agreements with trust and estates provisions.